Lockdown Economy United States

Country Report

Watch Lockdown Economy USA interviews here.

19 Entrepreneurs: 10 small businesses; 6 micro businesses, 3 self-employed

Geography: Encinitas, Henniker, Irvine, Libertyville, Los Angeles, Miami, Milwaukee, New York, Phoenix, Portland, Sacramento, San Diego, San Francisco

Timelines: June 2020 - April 2021

Sectors: administrative service, education, hotels and restaurants, manufacturing, advertising, veterinary, business consultancy, travel, retail

The COVID-19 pandemic quickly spread across the United States throughout the spring of 2020, initially clustering in densely populated cities on the East Coast before eventually reaching rural communities and small towns across every state [1]. The subsequent lockdowns and health crisis also had devastating effects on small business owners, struggling enterprises, and working individuals whose practices were disrupted in attempts to stop the spread and save lives. The number of unemployed persons in the US hit a record high of 14.7% in April 2020. And while having since declined, those remaining unemployed disproportionately number minority groups, women, and young people [2].

The Economic Policy Institute found that as recently as November 2020, over 25 million workers in the US were officially unemployed, out of work due to the pandemic, or experienced a reduction in work hours or pay [3]. Small businesses across the United States have suffered heavily from the pandemic, with many having to pivot or completely transform their business practices in order to survive. In the Lockdown Economy interviews, Think Tank AlterContacts spoke with small business owners and entrepreneurs from coast to coast, in small towns and big cities, to learn how they strategized. Themes of resiliency, adaptability, and charity were common among most of the interviewees, with many highlighting the selflessness and ingenuity they witnessed and took part in since the first lockdowns began. 

American small business owners contacted for interviews were working in various fields, including the hospitality industry, tourism, retail, and consulting, among others. All the interviewees described their professional experience navigating the pandemic, and how this disrupted or changed aspects of their business. What is clear from the insights they shared is that the small businesses were disproportionately affected by the pandemic and subsequent lockdowns. However, the entrepreneurs rose to the challenge by pivoting their strategies, collaborating with their peers, and making tough decisions. This chapter focuses on how small business owners across the United States fared over the pandemic, exploring what resources were made available to them, and what silver linings, if any, have been illuminated by the entrepreneurs. 

The pandemic exposed inequities in the health risks and provision of healthcare to disadvantaged and at-risk communities 

The pandemic showcased inequality in health services and care across the United States, with women and minorities being at greater risk of coronavirus contraction and steep medical bills [4]. The COVID-19 pandemic took hold in the US and changed the working landscape for many,  by forcing personnel to work from home, or with restrictions that fell heavy on small business owners. Minority groups were also disproportionately affected by the lockdowns and layoffs, with 61% of Hispanic adults experiencing a job or wage loss since COVID-19 began [4]. 

Big-box and major chain store franchises in the retail industry were at an advantage to switch to mainly online functioning of their businesses. Small businesses across the US may not have had an online presence at all, let alone social media, a proper website, or an online web store, prior to COVID-19. Naturally, this immediately placed many small businesses, particularly those already struggling financially at the time of the first lockdowns, in an unfavorable position when it came to new consumer habits.

The Brookings Institution revealed that the economic shutdown was hardest on lower-wage earners, those with less education, and minority groups [4]. These findings were echoed in the comments of several interviewees, including Heidi Solomon, Vice President of Global Sales of VXI Global Solutions and Founder and CEO of GirlzWhoSell. Heidi, who runs an organization dedicated to assisting women advance in the entrepreneurial realm, claimed women hold a solid majority of entry-level positions (66%) in the American healthcare industry, which often include frontline, lower-paying positions [5]. She noted further that during the pandemic, many working women also took charge of the home-schooling of their children, needed as schools closed across the country [6]. 

Call to Action: Immediate assistance securing grants, loan approval for small businesses and particularly minority-owned businesses 

Due to the disproportionate effects of the pandemic, it is clear that disadvantaged groups, and emerging small businesses, are particularly exposed to greater financial harm. To help out these groups, the US government has introduced initiatives at the state and federal levels to provide temporary relief, long-term loans, and tax exemptions, among other policies. 

Some of the key acts offered across the US to small businesses included tax benefits, such as the Employee Retention Credit and Paid Leave Credit, which allowed owners to keep employees on their payroll with 50% of up to $10,000 in wages paid [7]. The Paycheck Protection Program, implemented by the Small Business Administration with support from the US Treasury, is another major form of financial assistance, authorizing up to $659 billion toward job retention purposes among others [8]. 

A robust financial recovery plan would ideally extend these programs at least through the near future, and expand them to include small business grants for businesses beset with the threat of bankruptcy and operations uncertainty. Guarantees of financial support, as well as educational resources to help cash- and time-strapped entrepreneurs navigate the application process for these grants, would be a much-needed service in the public interest.

The hard-hit hospitality sector desperately needs support as domestic and international tourism remains lower than pre-pandemic levels

The sudden loss of domestic and international tourism related to the lockdowns and pandemic-related uncertainties severely affected the US retail and hospitality industry. The hospitality sector has been majorly affected by the lockdowns since they were first introduced. Particularly in the major US cities, where tourism functions as a primary source of income for many small businesses, the closures shuttered many doors temporarily or permanently. 

Concerns raised by several of the small business owners contacted by Think Tank AlterContacts point to the uncertainty of the near future, with all the travel restrictions and potential lockdowns that are keeping tourism down. Elie Sasson, the owner of a guided-tour business in California, has had to pivot his tours to locals rather than tourists. Even as the summer came along with a reduction in case numbers, Sasson claims many individuals were still skeptical of international travel and said business remained slow [9].  

As many businesses pivoted their demographics to primarily serve local clients instead of relying on seasonal or transient clients, others had little to no such flexibility. Restaurants, bars, tour guides, and other services, in particular, faced an uphill battle merely staying open with all the restrictions, even before considering the drop in clientele. 

Some needed to recruit new partners, such as Jill Kuehler, owner of craft distillery Freeland Spirits, in Portland, Oregon. Jill transitioned her business to produce hand sanitizer at the start of the pandemic while maintaining part of the original business idea by offering “home cocktail kits” for curbside pickup [10]. It took the ingenuity of many such small businesses to navigate how to keep themselves afloat. 

Call to Action: Safe restarting of domestic and international tourism, crucial for small business in the United States

Many big cities, such as New York City and San Francisco, are major tourist destinations, and small business owners across the country are still struggling to recoup their losses from the decrease in travel traffic. Considering the mass vaccination rollout over the past year in the US, small business owners and workers are understandably eager for tourism to resume. Municipal governments should work with tourist campaigns and business partners to safely encourage inter- and intrastate travel, while mass international tourism still remains unlikely in the near future.

American cities and states bear a unique opportunity to showcase to domestic travelers all the offerings of their respective homes, to slowly reintroduce activity at brick-and-mortar stores, and foster economic growth. Policies introduced in the US to assist small businesses hampered by the lack of tourism included beverage industry tax relief, extended business hours, and street permits for terrace and restaurant space [11].

These financial loans were absolutely crucial for the survival of many small businesses, as over 30 million small businesses in the US experienced decreased revenue or closure as a result of the pandemic [12]. 

While the introduction of long-term low-interest loans for small businesses may bring good news for some, many in the hospitality sector are looking for a more comprehensive plan for a full reopening. Given the likelihood that pre-pandemic tourism levels are not expected to return for the near future, many are rightly concerned as to how they can plan their business models. 

International tourism may certainly be a tougher sell, but promoting domestic tourism and encouraging residents to shop locally and support small businesses would be a massive assistance. Incentives for domestic tourism to increase small businesses’ activity would encourage travelers to foster business in their local economies until international travel resumes.

Small businesses need greater protection, assurances and financial assistance in addition to loans

Small businesses across the United States were eligible for financial assistance throughout the COVID-19 pandemic. At the federal level, the Small Business Administration (SBA) implemented the Payment Protection Program (PPP), Economic Injury Disaster Loans (EIDL), as well as a number of tax benefits for small businesses [8]. According to CNBC, Isabella Casillas Guzman, the new Administrator of the United States SBA, oversaw the transfer of $1 trillion in COVID-19 loans, grants and other forms of financial assistance for small businesses [13].

The Payment Protection Program provided small-business owners with funds to pay up to eight weeks of payroll costs, including benefits [8]. The PPP could also be used to pay interest on mortgages, rent, and utilities. As of May 31st, 2021, when the program ended, the SBA had guaranteed over 11.8 million PPP loans to small businesses, worth a total of approximately $800 billion [12].

For many entrepreneurs, including John Durning, the owner and operator of Pizzeria Deville in Libertyville, Illinois, the PPP was a lifeline for their small business. He claims the PPP assistance had a ‘second round’ where aid was again provided, and he is personally aware of dozens of small businesses in his locale, where the PPP money saved them [14]. Importantly, the PPP is still formally a loan, albeit a low-interest one, and not a grant, meaning it technically needs to be repaid at some point. In practice, however, the SBA reviewed loan forgiveness applications for small businesses that met certain criteria, including if 60% or more of the loan money was spent on payroll costs [12]. 

Economic Injury Disaster Loans are loans that prior to the pandemic were typically reserved for small businesses, particularly those in low-income communities, affected by natural disasters like hurricanes [12]. EIDL offers a maximum loan amount of $2 million (up from $500,000) for small businesses, with a loan term of 30 years and payments deferred for the first 2 years [15]. This loan has a fixed interest rate of 3.75% for businesses and 2.75% for private non-profit organizations. While EIDL is implemented through the SBA as is the PPP, they are non-forgivable. Still, hard-hit businesses in low-income areas can apply for an EIDL ‘advance’ of up to $15,000 that does not need to be repaid [15].

Call to Action: Extension and expansion of small business grants and loans throughout 2022 to help the ailing hospitality sector

Given the uncertainty of the market, the current labor shortage affecting the hospitality sector, and reopening plans affected by new variants of the virus, financial assistance for small businesses needs to stay in place indefinitely. The pandemic remains underway, despite the urgency in which politicians have taken calculated risks to remove restrictions in an effort to appeal to voters. 

There needs to be greater loan flexibility; many small business credit scores have been impacted by COVID-19 through no fault of their own, and are now suddenly caught in a long-term loan repayment process.

Despite the much-needed immediate help provided by these programs, especially earlier on in the pandemic, the hospitality sector is still in great need of recouping its losses. CNBC reported that US restaurants, in particular, have unfortunately faced both labor shortages and public concerns on the faster-spreading COVID-19 delta variant [13]. The Small Business Administration claims the federal Restaurant Revitalization Fund provided $28.6 billion in funding to over 100,000 businesses, before adding that the demand was 2.5 times that amount [13].

This finding is backed by entrepreneurs in the American hospitality sector, including Sofia Pinzon, the founder of TOASTY, an avocado toast bar in San Francisco. Sofia said she received emergency loans for her business at the beginning of the pandemic, which helped her keep her payroll, but as of right now is receiving no help [16]. Her case highlights how financial assistance for COVID-affected businesses has been mainly a temporary measure. 

The American Government Accountability Office reports that many EIDL applicants cite a lack of information and uncertainty about their application status. Furthermore, it claims that the SBA has not always provided applicants with critical information on their loans, including loan amount limits and the definitions of key terminology [12]. These bureaucratic challenges have resulted in the SBA’s customer service lines being flooded with small business calls, application delays, and even the filing of multiple loan applications due to procedural setbacks. The Government Accountability Office has called for a more comprehensive communication strategy by the SBA, to better prepare small business applicants for eligible programs [12].

The rise of digitization of business practices is here to stay, and small businesses need help adjusting

With the pandemic moving many businesses and even entire industries online, small businesses across the US had to adapt quickly or risk being left behind. This added pressure on the hospitality industry was notable as delivery services began taking advantage of the massive uptick in restaurant deliveries. In the first weeks of lockdowns, communities tried supporting their local bars, cafés and restaurants, but getting takeout or delivery quickly became costly for many, making this practice unsustainable [16]. 

Small businesses have had to transition their business models to support a partly or fully digitized format. Some, such as the consulting sector, have been able to continue business largely remotely for the time being, despite entrepreneurs in that field eager to resume face-to-face coaching and communication. However, the hospitality sector was unable to make the shift to such a ‘work from home’ strategy, being it dependent on physical visitations to brick-and-mortar locations.

Baristas, servers, bartenders, and other hospitality workers were faced with the pressure to quickly adapt to some form of ‘hybrid,’ partly online model, or risk a complete business shutdown. Many in these industries had little if any digital marketing training, meaning they needed to learn in real-time how to develop their websites, social media, and marketing practices. 

For this reason, many small business owners, including several of those interviewed, regard increased internet access for all and improved internet infrastructure for small businesses as imperative for their digital transition. Robert Finnegan, an experienced Portuguese-English independent translator and interpreter, remarked that internet connectivity or bandwidth issues in rural communities in the US remain a serious impediment to internet equity. Building on this, while internet connectivity for the hospitality sector may be dependent on where the small businesses are located, digital literacy is important for small businesses everywhere [18]. 

Call to Action: Ensuring all small businesses have reliable access to high-speed internet and educational resources to assist them in transitioning their businesses to the online sphere  

Without the internet at every small business’ disposal, the American hospitality sector could have faced an insurmountable challenge during the pandemic. Small businesses not only need, but rely on stable internet access to inform customers of orders and updates, to advise them on changing hours of operation, to showcase their services and products without needing to physically be in-store, and much more. The role of social media in pushing out e-commerce has been a massive development that many small businesses use every day to advertise and ship out products from handmade crafts, clothes, food, etc. 

According to a survey from earlier this year by the website Digital, nearly one-quarter (23%) of small retailers in the US do not have their own website [19]). At first glance, this statistic might suggest traditional small businesses being resistant to changes in new forms of business, but a closer look reveals more. Of those small businesses existing without a website, over one-quarter (26%) said they lack the funds to create one, 26% claimed to not have the staff to support one, while 24% responded they lacked the knowledge to create and run a website [19]. These findings tell us that many small businesses do in fact want to take steps towards digitizing their businesses’ practices but may lack the time, effort, and funds to do so. 

Building a website or online presence has never been more accessible and affordable, and the online visibility of a business can make or break their practice. For this reason, there should be offerings of digital literacy and basic e-commerce skills training as a public service, at least for the remainder of the pandemic. Of course, there are private companies that offer digital marketing packages with a host of tools to increase a business’s online presence. However, outsourcing these critical skills to third parties, often at a steep price, would be a missed opportunity for small business knowledge. 

Speaking to the hospitality sector specifically, a recurring sentiment among interviewees was that the small businesses who relied solely on external help, who had no online presence of any kind, were far likelier to lose out to the competition. In the always-evolving, highly competitive hospitality sector, businesses that were not diversified enough, or did not try to branch out their business model during the pandemic, were at significant risk of stagnation.


A common theme voiced by American small business owners interviewed in the Lockdown Economy is that the forced closures gave many a chance to reevaluate how to market and grow their businesses. This naturally came at a major cost, as those businesses that were unable to cater to the new demands posed by the lockdown struggled to adapt. Plans for expansion or renovation were put on hold for many entrepreneurs, but the changes forced onto the hospitality sector made small business owners redesign their businesses and take stock of their possibilities. 

Innovation alone, however, will not bring micro and small enterprises in the hospitality sector out of the financial pitfalls of the pandemic. The socio-economic toll of not bailing out main-street small businesses would be devastating. Steps need to be taken to ensure they are prepared to tackle the remainder of the pandemic and withstand further lockdowns. Two major ways to do this would be to ensure that small businesses are equipped with reliable internet infrastructure and educational campaigns to inform them on how to pivot their business’ online potential and to provide continued or even expanded financial support. 

The pandemic revealed or worsened the adversities many small businesses in the US face, as they struggle to compete with big-box stores and corporations that adjusted to online business more swiftly. While loans and grants were provided in certain states and in many cases helped many businesses survive, it is clear that continued financial uncertainty is an existential threat for many small businesses. Bringing some level of tourism back, even in the form of domestic travel, could provide a boost in business activity and support that many small businesses desperately need. 

Educational initiatives for small businesses could assist millions of entrepreneurs and employees in navigating the loan-application process and providing basic digital marketing knowledge to establish their online business presence.

Small businesses across the United States continue to grapple with lockdown uncertainty, and now have to conduct vaccination record checks, essentially acting as their own security. Small businesses have had to adhere to social distancing and mask-wearing compliance guidelines throughout the pandemic, while many considered ‘non-essential’ struggle to keep their businesses afloat. 

In light of all this, it is remarkable that most US-based small businesses interviewed mentioned the rise of donations, general helpfulness, and emotional and professional support by their community. This phenomenon persists despite many businesses naturally struggling themselves, but are making strides to encourage local shopping, and build a dedicated customer base. 

Written by Ryan Mitchell, a Master's of Planning (MPL) from the School of Urban and Regional Planning of the Queen's University

Edited by Sara Pasqualetto

Editor-in-Chief - Julia Skupchenko


1- Brookings Institution. (2020). Ten facts about COVID-19 and the U.S. economy. Available at: https://www.brookings.edu/research/ten-facts-about-covid-19-and-the-u-s-economy/ 

2- The Guardian. (2020). Year ends on low note as 787,000 more Americans file for unemployment. Available at: https://www.theguardian.com/business/2020/dec/31/us-unemployment-december-coronavirus

3- Economic Policy Institute. (2020). More than 25 million workers are being hurt by the coronavirus downturn. Available at: https://www.epi.org/blog/what-the-next-president-inherits-more-than-25-million-workers-are-being-hurt-by-the-coronavirus-downturn/  

4- Brookings Institution. (2020). Why has COVID-19 been especially harmful for working women? Available at: https://www.brookings.edu/essay/why-has-covid-19-been-especially-harmful-for-working-women/

5- McKinsey & Company. (2020). Women in healthcare: Moving from the front lines to the top rung. Available at: https://www.mckinsey.com/industries/healthcare-systems-and-services/our-insights/women-in-healthcare-moving-from-the-front-lines-to-the-top-rung 

6- Think Tank AlterContacts, Lockdown Economy Initiative. (January 28, 2021). Lockdown Economy USA in Sales with Heidi Solomon. Available at: https://youtu.be/IVczO6Qjm9s 

7- Internal Revenue Service. (2021). FAQs: Employee Retention Credit under the CARES Act. Available at: https://www.irs.gov/newsroom/faqs-employee-retention-credit-under-the-cares-act 

8- U.S. Department of Treasury. (2021). Assistance for Small Businesses. Available at: https://home.treasury.gov/policy-issues/coronavirus/assistance-for-small-businesses 

9- Think Tank AlterContacts, Lockdown Economy Initiative. (December 26, 2020).  Lockdown Economy USA in a Tourism Business with Elie Sasson. Available at: https://youtu.be/lMRnsOfeRxg

10- Think Tank AlterContacts, Lockdown Economy Initiative. (March 11, 2021).  Lockdown Economy USA in a Craft Distillery with Jill Kuehler. Available at: https://youtu.be/s286VNc9acE 

11- USA Today. (2021). Outdoor dining surged amid COVID. But is eating al fresco at restaurants here to stay? Available at: https://eu.usatoday.com/story/money/restaurants/2021/07/27/outdoor-dining-restaurants-covid-pandemic-changes-patios-heaters/5379184001/ 

12- U.S. Government Accountability Office. (2021). Federal COVID Relief for Small Businesses Arrived Quickly, But With Risks to Loan Programs. Available at: https://www.gao.gov/blog/federal-covid-relief-small-businesses-arrived-quickly%2C-risks-loan-programs

13- CNBC. (2021). Biden’s new SBA head on Covid loans and financial relief businesses can still get. Available at: https://www.cnbc.com/2021/08/11/biden-sba-head-on-covid-loans-financial-help-businesses-can-still-get.html 

14- Think Tank AlterContacts, Lockdown Economy Initiative. (March 29, 2021).  Lockdown Economy USA in a Restaurant with John Durning. Available at: https://youtu.be/8xcS3BMytkg 

15- Small Business Administration (2020). Targeted EIDL Advance and Supplemental Targeted Advance. Available at: https://www.sba.gov/funding-programs/loans/covid-19-relief-options/eidl/targeted-eidl-advance-supplemental-targeted-advance 

16- Think Tank AlterContacts, Lockdown Economy Initiative. (December 11, 2020).  Lockdown Economy USA in an Avocado Toast Bar with Sofia Pinzon. Available at: https://youtu.be/pctFzYg6rI8 

17- Think Tank AlterContacts, Lockdown Economy Initiative. (December 25, 2020).  Lockdown Economy USA with Translator and Interpreter Robert Finnegan. Available at: https://youtu.be/CZ6GeDXisgw 

18- Forbes. (2020). Why Computer Literacy Matters During The Covid-19 Pandemic. Available at: https://www.forbes.com/sites/scottsargrad/2020/09/16/why-computer-literacy-matters-during-the-covid-19-pandemic/ 

19- Digital. (2021). Despite pandemic 1-in-4 small retail businesses still don't have a website. Available at: https://digital.com/despite-pandemic-1-in-4-small-retail-businesses-still-dont-have-a-website/

In 2020 Think Tank AlterContacts launched the Lockdown Economy, an international non-profit grassroots social-economic and educational initiative to help small businesses and self-employed professionals overcome the challenges of the pandemic and reactivate the economy. It is registered by the United Nations as an Acceleration Action for SDG. From May 2020 until July 2021 we have been collecting insights from small business owners and self-employed professionals from different business sectors and countries to see how the COVID-19 pandemic affected their business, their life, and future. This article is based on the field research of the Lockdown Economy.